Home values dropped an average of 16% in 15 of 16 key presidential battleground states since the financial crisis.  Despite this key fact most of the Republican presidential candidates have chosen to be largely silent on what they would do to end the housing crisis. They have preferred to concentrate on jobs and unemployment issues.

The Progressive Policy Institute points out that 2/3 of the voters in the key battleground states own homes, a number that is much greater than that of the unemployed in any of these states.  Potentially, many more voters have been negatively affected by tumbling home values than by joblessness.  As many as 12 million homeowners now have underwater mortgages.  The states that have lost the greatest value between November 2010 and November 2011 include: Nevada (91%); Minnesota (74%); Arizona (72%); Missouri (69%); Florida (64%); North Carolina (62%); Wisconsin (61%); New Hampshire (59%); Ohio (57%); Colorado (57%); Pennsylvania (56%); Indiana (53%); Michigan (53%); Iowa (51%); Virginia (48%); New Mexico (43%).  Many of these are battleground states that must be won to sew up the election for any presidential candidate.

The PPI report asserts that housing must be part of any candidate’s economy policy in order to win the election in 2012.

Home Values May Prove Political Football in Battleground States is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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A report associated with the Campbell Housing Pulse Tracking Survey concludes that real estate investors buying with all cash are putting downward pressure on home values.

In December 2011 cash buyers represented 33.2% of the market, according to the Campbell study.  Most of these real estate cash buyers are real estate investors buying investment properties since 74% of all real estate investors used all cash to buy homes last month.  The HousingPulse survey reports that 22.8% of all December buyers were investors.

Real estate cash buyers are able to successfully bid lower prices and win contracts because of the lower risk and shorter closing timeframe involved in all cash deals.  Often these deals are not the first ones attempted, but are accepted as back-up offers when non-cash deals fall through.

The report says real estate investors generally offer 10-20% under list price while retail buyers settle for list price.  Real estate investors require 2-4 weeks to close while retail buyers are now taking 6-8 weeks to close because of financing.

This is a sign that savvy real estate investors are getting back into the game, because they know now is the time to buy.

Survey Shows Real Estate Cash Buyers Place Downward Pressure on Home Values is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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The NAR also released statistics on the inventory of homes for sale and shows a decline of 22.29% from a year ago.  The 146 MSAs monitored by the NAR survey found that at the end of 2011 there were 1.89 million single family homes on the market in the U.S., a drop of 6% from November 2011. The median days on market in December: 122 days, down 4% from a year ago.

Housing Inventory Declines is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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According to the National Association of Realtors existing home sales surged 5% from 4.39 million units in November to 4.61 million units in December.

Investors represented 21% of the market, up from 19% in November. All cash sales were 31% of all closed deals compared to 28% in November.  The median home price was $164,500 or 2.5% lower than the same time last year.  Contract failures held steady at 33%.

NAR representatives said that there is a large pent-up demand for housing that will be gradually met as the economic picture improves.

Existing Home Sales Up 5% in December: NAR is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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One would think that desperate homeowners would be jumping for joy in Florida with the opportunity of making up to $20,000 as an incentive for selling an under water house through a Short Sale or deeding it back to the bank with a Deed-In-Lieu for foreclosure.  The results of Bank of America’s test program have not been as spectacular as anticipated to date.

Since the program was announced in August only 60 homeowners have collected the incentive payment.  Bank spokesman, Richard Simon, said it was too early to tell the results of the program.  The bank expects thousands in the end to take advantage of the program which will pay qualified homeowners 5% of the unpaid balance with a minimum of $5000 and a maximum of $20,000 to settle the default short of a foreclosure. Many Agents in Florida have indicated that they do have incentive deals in the pipeline but as yet uncompleted.

Bank of America has targeted about 20,000 of its 1.1 million mortgage holders in Florida for this incentive program.  It selected Florida as the pilot state for the program based on the large number of homes in pre-foreclosure there.

How is BOA Short Sale Incentive Test Going in Florida? is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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A recent Harris Interactive poll asked a group of 2,237 adults who were online in December about their planned financial behaviors in 2012.  One of the questions asked whether respondents planned on refinancing a mortgage in the new year.  Only 5% responded positively, the same percentage as those who answered the same question in 2009 and one point lower than that of 2010 respondents.

The survey received a larger positive response on the refinance question from respondents in the Gen X group (age 35 to 46).  For that group the response was 9%. The survey does not reveal how many of those surveyed are current mortgage holders.

Is There Consumer Demand to Refinance? is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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In an effort to make refinancing available to more homeowners Freddie Mac announced that it would no longer require homeowners to have credit scores of 620 or higher as long as the loan is current, the LTV at 80% or higher, and the refinance is being completed with their existing lender.

The new rule became effective for loans settled as of January 5, 2012.

In December Fannie Mae eliminated the need for servicers to determine the borrower’s ability to repay a refinance.  Both servicers have eliminated up front refinancing fees, lifted the limits to refinancing underwater loans, and taken steps to mitigate the representation and warranty risks incurred by the lender on the old loan in an effort to make low interest refinancing accessible to more homeowners.

Freddie Mac Cuts Refi Credit Score Requirements for Some is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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This past week two Federal Reserve officials made suggestions to improve the housing market in addition to Fed chairman, Ben Bernanke, who came out with a game-changing white paper with numerous suggestions on how to reduce foreclosures and their negative impact on home values.

Federal Reserve Bank of New York president, William Dudley, espouses the use of principal reductions to take the heat out of the foreclosure problem and he urged Fannie Mae and Freddie Mac to begin to accept principal reductions.  Meanwhile, Freddie Mac’s outgoing CEO, Ed Haldeman, has indicated that principal reductions are not a good idea because they may lead to higher default rates. Currently principal reductions are against GSE policy.

Dudley believes a system of “earned principal reductions” could keep the temptation for strategic defaults in check.  Under the plan, homeowners would have the option of paying off a loan below mortgage value at certain intervals given a period of timely payments.

Fed Board of Governors member, Elizabeth Duke, commented last week that tight lending standards are stifling new mortgages and hurting the economy as a whole. While standards are important, lending requirements should be loosened for creditworthy individuals who are currently being denied, according to Duke. Prime loan credit scores now average around 760 while in 2000 they were 720; FHA scores average 700 now and 650 a decade ago. Fewer than half of all lenders offer loan packages to those in the lower end of the credit spectrum.  Duke believes that in the short term credit standards must be eased and the GSEs will need to play a continuing role in guaranteeing loans in order to assure that lenders will willingly underwrite loans based on lower standards.

The paper Ben Bernanke sent to the Senate Committee on Banking and House Financial Services Committee last week is much too detailed to cover at length here, but it does contain concrete analysis of the continuing housing industry weaknesses and a wide variety of potential solutions for Congress to consider.  A short list includes:

–Develop an REO-to-rental program on a bulk scale;

–Moderate inflow of properties to foreclosure status by continuing to improve efficiencies and incentives for short sales and deed-in-lieu programs;

–Remove barriers to the creditworthy to obtaining loans and refinancing.

Fed Makes Recommendations to Improve Health of Housing Market is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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A Houselogic survey demonstrates that voters are most concerned about jobs and housing policy as election year issues for 2012.  Respondents were asked: “What issue area will have the greatest impact on your vote in 2012?”

Jobs were mentioned as the top issue by 54% of respondents.  The next most critical issue was housing, which ranked first for 27% of those surveyed.  National security was mentioned by only 8% of those surveyed, health care by 4% and energy/environment by 2%. Another 4% gave other answers.

It is apparent that issues related to the economy are upper-most in the minds of voters.  Both jobs and housing are key to economic recovery.  Housing accounts for 15% of the GDP; one job is created for every two homes that are sold.  The American voters clearly understand that the future of the economy is tied to what happens in the housing market.

What are your top concerns for this young year?

Voters’ Biggest Concerns: Jobs and Housing is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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A research report by the Federal Reserve Bank of New York finds that amateur real estate investors were more to blame for the housing bubble in markets in California, Nevada, Arizona and Florida than was previously thought.

More than one-third of the mortgages granted in 2006 went to people who owned more than one house.  Frequently these neophyte investors turned to shady no-documentation sub-prime mortgage schemes. In Arizona, California, Florida and Nevada investors made up almost half of the mortgage-backed home purchases during the housing bubble and in these states home prices more than doubled between 2000 and 2006. The bubble caused millions of homeowners to have to pay more for their mortgages.

When home values plummeted in 2006 25% of those who defaulted were investors, and in the key bubble states investors made up more than one-third of the defaults between 2007 and 2009.

The report recommends that there be higher interest rates and larger down payment requirements placed on speculative borrowing to avoid any future speculation-driven bubbles.

What’s the lesson?  It’s dumb to go into business without the proper education.  Investing is an incredible opportunity to build lasting wealth and live a really great lifestyle.  But you need to know what you’re doing.  If you don’t, you could end up owning 12 houses and upside down on every single one.  You need to be trained, and you need to keep your ear to the ground to see what’s coming.

That’s what my REWealthCoach Gold program is for.  My goal is to help real estate investors build fully rounded, diversified investing businesses AND keep them informed about what’s going on in the industry and what cool new techniques are available.  If you’re interested in getting started – go ahead to start your trial membership for only $7.95 at www.REWealthCoach.com/special.

Federal Reserve Findings: Real Estate Investors to Blame for Housing Bubble is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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LPS reported that foreclosure starts jumped 5.7% between September and October as processors served notices on 232,865 families.

On the positive side, delinquencies are down significantly.  Homeowners who were 90 days late but not yet in foreclosure in October were down 19% from last January.  A total of 1.76 million homes were in that category, but the numbers represent a drop from 3.06 million homes in January 2010, a 42.5% drop from the peak.  The number behind one payment dropped 7.4%, and 60 day late numbers dropped 11.8%. Those either in foreclosure or 90 days or more late included 3.97 million households as of October, a 9.2% drop from January.

The length of time homeowners are in the foreclosure process is at an all-time high.  On average those behind at least 90 days were in the process of foreclosure for 388 days.  That number as of January 2011 was 344 days and 257 days in January 2010.  The average homeowner in foreclosure as of October 2011 hadn’t made a payment for 631 days compared to 523 days last January, and 410 days in January 2010.

In October nearly half of the foreclosure starts were for repeat starts that occurred after a failed loan modification or similar program.

Foreclosure Dockets are Crowded is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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Ron Stuzenegger, head of Bank of America’s legacy asset servicing division, has indicated that the bank is in the process of preparing a rental program for former homeowners of property it is taking back as REOs.  BOA is currently looking through 1.1 million loans that are 60 days or more delinquent to determine which might be good candidates for the program.

It would be BOA’s intention to either short sale or foreclose upon these properties, but in areas where investors in large enough numbers are available to buy these properties, the bank will offer a deed-for-lease program that will potentially keep the former homeowner in place.

The Federal Housing Finance Agency is currently also developing a foreclosure rental program.  Earlier in the year it received over 4,000 ideas on how Fannie Mae and Freddie Mac can go about running this program.

Because private banks own about $50.4 billion in foreclosed assets many of the major lenders are likely to follow BOA’s path to develop their own proprietary deed-for-lease programs.

BOA Developing Foreclosure Rental Program is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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Even though 2011 home values dropped an average of 5.1% and prices fell in 302 of 384 housing markets tracked by the Fiserv Case-Shiller Indexes, the picture should get considerably brighter as housing approaches 2013. Fiserv’s chief economist, David Shiff, believes that the housing market will see greater stability in 2012 than in the past several years. Affordability is 40% better than in 2006.  Interest rates will remain low through all, or most of the year.

By 2013 Fiserv predicts that housing prices will be on the rise in 95% of all housing markets in the U.S.  On the positive side Shiff remarked:

“Mortgage delinquency rates have been falling for more than a year. Foreclosure rates have started to decline. The flood of bank-owned sales, which has swamped many markets, will finally begin to recede this year as fewer houses enter the foreclosure pipeline. Meanwhile, housing affordability has nearly returned to pre-bubble levels. Relative to family income levels, the average U.S. home is now only 5 percent more expensive than it was in 2000.”

There are still reasons to be cautious.  Stiff adds, “Weak job growth numbers in May and June, political wrangling over the Federal government debt ceiling, and the ongoing debt crisis in Europe have all increased pessimism. Households will not become more optimistic about housing markets until they are convinced that the job market is improving and that politicians will not allow debt problems to become new economic catastrophes.”

Fiserv Optimistic About Housing Market Stability is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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FHA has traditionally (and incorrectly) considered flipping houses—the practice of Investors immediately reselling a distressed property for more money—to be a red flag for abuse.  The practice does tend to lower the value of homes around the distressed property, but the FHA agrees that the alternative would be slower restoration of distressed properties to normal use.  The FHA is again willing to ignore for another year its anti-flipping regulations that would require property to be held for at least 90 days before a home could be resold so that Investors can continue to quickly transform distressed and abandoned properties into homes for new homeowners and renters once again.

According to acting Federal Housing Administration commissioner, Carol J. Galante, the waiver is “intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight.  FHA remains a critical source of mortgage financing and stability and we must make every effort to promote recovery in every responsible way we can.”  The FHA continues to require that any quick resale that exceeds 20% of the original purchase price be documented before the new buyer’s FHA loan can be approved.  There is also a strict requirement that all sales be at “arms-length.”

FHA Extends Allowance of Flipping Houses Another Year is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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In December, the U.S. House approved a 2 month extension of the payroll tax break in order to avoid a 2% New Year tax boost on millions of workers that would have impacted the GDP negatively by nearly 1%.  The agreement comes at a price to those who sign up for a new mortgage or refinance after May 2012.

New mortgage-holders will be charged over the next ten years a tax on all new loans financed through Fannie Mae or Freddie Mac.  The total cost of $31 billion for a 59 day extension of the payroll tax break will be paid by extra fees for Fannie and Freddie underwritten loans, something that will impact about 90% of the loans written. The additional fee is not huge on a monthly basis, but over the 10 year life of the fee, it will add up.  Someone who posts a $600,000 loan after May 30 will be charged an extra $50 per month, a fee that will add up to $6000 over 10 years. The 2 month payroll tax cut will be paid for by $36 billion in extra fees over a 10 year period.

The impact is likely to be a run on mortgages and refis in the first half of the year in order to avoid the additional tax, and then a slow-down in mortgage requests for the second half of the year as people who might have bought later decide to speed up the buying process.

If this off-the-wall method of paying for the payroll tax is used to fund the remainder of the year the effect on the housing market could be catastrophic.

Payroll Tax Break Extension Bad Deal for New Mortgage-Holders is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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A couple weeks ago Freddie Mac announced that it would extend the terms of forbearance agreements in order to help more unemployed families to stay in their homes.  This past week it was Fannie Mae’s turn to help out the unemployed families in homes backed by its mortgages.

According to Fannie Mae’s servicing guidelines the servicer may approve any qualified mortgagee for reduced or no loan payment for up to six months if the reason for a hardship is loss of a job. The homeowner must be in default or in imminent danger of default. Other factors that must be present: the total housing component must be greater than 31% of present income, and the borrower cannot have cash reserves in excess of 12 months of mortgage payments.

The forbearance program is only for a home lived in by the borrower and not second homes or income properties and it is not available to those with FHA or VA loans.

When the homeowner in an approved forbearance program gets to the last month of the forbearance and a review finds that the hardship due to unemployment still exists, the servicer may apply to Fannie Mae to approve an extension of 6 months to the forbearance agreement.  All requirements remain the same.

Servicers must halt all foreclosure actions during the period of forbearance and must monitor regularly to make sure the homeowner’s situation has not changed.

Fannie Mae Matches Freddie Mac in Extending Mortgage Forbearance is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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The 1.8 million foreclosure filings recorded by Realtytrac in 2011 is 35% below the total set in 2010.  The 205,000 recorded in December was the lowest total recorded since 2005.  That’s the good news.

The bad news is one in every 69 homes on average, received a foreclosure filing of some kind during the year.  Uncertainty over documentation and court litigation pushed the timelines for foreclosure higher. The decline in foreclosure numbers does not mean the crisis is over.  Not by a long shot! Expect filings in 2012 to hit somewhere in between the record numbers completed in 2010 and the smaller 2011 numbers.

Atlanta is the only city over 200,000 in Realtytrac’s tally of foreclosure filings that continued to grow compared to the previous two years.  Atlanta foreclosure filings in 2011 were 2% higher than they were in 2009. Atlanta hit the number 12 spot on Realtytrac’s Top 20 foreclosure cities with a 3.69% foreclosure rate.

Las Vegas had the highest foreclosure rate in 2011 with a rate for cities of over 200,000 of 7.38%.  One in 14 homes received a foreclosure notice during the year in Las Vegas, despite a sharp drop that occurred in filings between the third and fourth quarter because of a law change in the state.

Half of the cities on the top 20 list are in California. Stockton, CA came in second on the top 20 list with a foreclosure filing rate of 5.43%.  Other California cities at the top of the list: Modesto (5.20%); Vallejo-Fairfield (5.20%); Riverside-San Bernardino (5.16%).

Phoenix was number 6 on the top 20 list at 3.69% foreclosure rate.

Foreclosures Declining in Top Foreclosure Markets, But Still High is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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When it comes to churning through the backlog of foreclosures the western states are far more efficient than eastern states.  This is because the majority of eastern states resolve foreclosures through a lengthy judicial process while western states, by and large, are non-judicial states where trustees can process foreclosures without going to court.

In three western states foreclosure rates dropped in 2011:  California (-21% ), Nevada (-19%) and Arizona (-25%), as these states worked through their foreclosure backlogs according to a Bloomberg article.   In several eastern states the backlogs grew throughout 2011: 7.4 percent in New Jersey, 5.2 percent in Connecticut and 2 percent in New York where tightened documentation standards increased the foreclosure timeline.

Judicial state, Florida, has the highest percentage of homes in some state of foreclosure (23%) and takes the longest time (1,017 days).  Other states that take multiple years to conclude foreclosure include Maine, New York, New Jersey, and Vermont.  All of these are judicial foreclosure states.

Which Area is Fastest at Processing Foreclosures? is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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Analysts are watching the figures on prepayment of loans to determine when the next wave of home refinancing kicks into high gear.  The impact has not been felt yet.

Prepayments dropped 6% in December for Fannie Mae 30 year loan securities.  January is also expected to be sluggish before the effects of HARP 2.0 kick in.

Homeowners have been waiting to see if more changes take place.  The Federal Reserve signaled the need for the broadest possible program when it suggested that non-Freddie and Fannie securitized mortgages and lender-owned mortgages be included in the program.

Analysts at JP Morgan Chase commented that an expansion of the eligibilities rules could violate terms of the prospectus to investors and that would be illegal unless default is impending on a loan.

HARP 2.0 Impact May be Felt by February is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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A popular session at the mortgage industry Five Star MPact Conference in Dallas, Dec. 4-6 focused on the use of bulk short sales to help stabilize neighborhoods quickly in the highest impacted areas. The idea seems to be gaining favor among lenders, housing non-profits and investor groups.

Participants commented that the one-up method of selling short sales to homeowners and investors is inefficient and will take as much as 10 years before the inventory can be completely absorbed.

Craig Nickerson, president of National Community Stabilization Trust advocates bulk short sales as a way of saving many in the next wave of foreclosures.  He indicated that without a dramatic solution there will be 1.5 million foreclosures by 2013, and then they will come down to the levels of this current year (around 850,000) through 2015.

HUD has created a $7 billion neighborhood stabilization fund that will be available to rehabilitate distressed homes in high foreclosure areas. Citi is developing a program that will facilitate short sales through multiple points of access in order to drive through more short sales in high foreclosure areas.

The key according to Francis Martinez Myers, president of Employee Transfer Corporation (ETC) is for lenders to pre-approve listing prices so that bulk sales can be facilitated.  She said that services must be tailored to meet the needs of investor and non-profit buyers.  Myers’ organization is working on a process that will pool short sale homes in one area to make the process faster and more convenient for investors and non-profits.

Chase indicated that they are working on ways to facilitate bulk transactions (both short sales and REOs) to non-profits through its “First Look” program.

Short Sales Stabilized Neighborhoods? is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

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